What is the sales tax on a car in Michigan?

Michigan charges a flat 6% state sales/use tax on vehicle purchases, with no county or city additions - the rate is the same everywhere in the state. A trade-in reduces the taxable amount, but only up to an annual statutory cap ($12,000 for 2026; the cap rises yearly until it disappears in 2029).

How much are dealer doc fees in Michigan?

Michigan caps dealer documentation fees at $280 or 5% of the vehicle price, whichever is less - one of the stricter caps in the country. The title fee is a flat $15, and registration is based on the vehicle's list price.

Do Michigan credit unions have better auto loan rates than banks?

Usually, yes. Michigan has an unusually strong credit union market - Lake Michigan Credit Union, MSUFCU, DFCU Financial, Genisys, Credit Union ONE, and UMCU among them - and their advertised auto APRs typically undercut national banks at the same credit tier. Most are open to essentially any Michigan resident through broad membership rules.

Michigan Auto Loan Rates August 2026

Lender	Type	Min credit	Term	APR (from)
NA Navy Federal	Credit Union	640+	36 mo	3.89%	Visit
BA Bank of America	Bank	660+	60 mo	5.19%	Visit
CA Capital One	Bank	660+	60 mo	5.39%	Visit
PE PenFed	Credit Union	650+	60 mo	5.49%	Visit
US USAA	Bank (Military)	640+	60 mo	5.49%	Visit
AL Ally	Bank (Online)	620+	60 mo	6.19%	Visit
U. U.S. Bank	Bank	660+	60 mo	6.29%	Visit
CH Chase	Bank	660+	60 mo	6.49%	Visit
WE Wells Fargo	Bank	660+	60 mo	6.59%	Visit
LI LightStream	Bank (Online)	670+	60 mo	7.24%	Visit

What's actually different about buying a car in Michigan

Loan pricing is national, but four Michigan-specific rules change your out-the-door math:

Flat 6% sales tax, statewide. Michigan's vehicle tax is 6% everywhere - no county or city add-ons, so there's no advantage to buying in one Michigan county over another.
The trade-in credit is capped (for now). A trade-in reduces your taxable amount, but only up to a statutory cap - $12,000 for 2026, rising $1,000 a year until the cap disappears in 2029. Trade in a $20,000 vehicle this year and you still pay 6% tax on $8,000 of value the credit doesn't cover. The credit only applies when the dealer takes your trade in the same transaction - selling privately first forfeits it.
Doc fees are capped at $280 or 5%, whichever is less. One of the stricter caps in the country. If a Michigan dealer's paperwork shows a documentation fee above $280, push back - it's not legal.
Title is a flat $15; registration follows list price. Michigan registration is ad valorem - based on the vehicle's list price when new - so a pricier vehicle costs more to register every year, which is worth folding into your monthly budget alongside the loan payment. Run the full picture with the affordability calculator.

The tax math on a real deal

Say you're buying a $35,000 vehicle in 2026 with a $15,000 trade-in:

Trade-in credit applies up to the cap: $12,000 (not the full $15,000)
Taxable amount: $35,000 − $12,000 = $23,000
Sales tax: 6% × $23,000 = $1,380
Plus title ($15), registration, and up to $280 in doc fees

If you finance the taxes and fees into the loan, that's roughly $1,700 added to your principal - about $32/month on a 60-month loan before interest. The cap's annual rise means the same deal gets slightly cheaper each year through 2029.

Michigan's credit union advantage

Michigan has one of the deepest credit union benches in the country, and their advertised auto APRs routinely undercut the national banks at the same credit tier. In our spring 2026 spot checks, Michigan credit unions were advertising 60-month new-car floors around 5% - for example, Credit Union ONE at 4.99% (February 2026) and University of Michigan Credit Union at 5.24% (May 2026) - against national bank floors typically half a point to a point and a half higher. Names worth a quote:

Lake Michigan Credit Union - the state's largest, historically among the most aggressive auto rates in the country; membership is open to most people via a small charitable donation.
MSUFCU and UMCU - the big university credit unions; membership reaches well beyond students and alumni.
DFCU Financial - known for paying an annual member dividend that effectively rebates part of your interest.
Genisys, Credit Union ONE, Lake Trust, Michigan Schools & Government CU - all quote competitively and are open to essentially any Michigan resident.

Rates move constantly - verify current figures with the credit union before you apply. The play: get one credit union pre-approval before you set foot in the dealership, then let the dealer's finance office try to beat it. Why credit unions price lower - and when a bank still wins - is covered in bank vs. credit union auto loans.

Refinancing in Michigan

If you financed at the dealership and suspect you overpaid on rate, Michigan's refinance process is standard: the new lender pays off the old loan and Michigan's $15 title work is handled in the transfer - there's no Michigan-specific penalty or fee worth worrying about. Start with current refinance rates and when refinancing actually pays.

Frequently asked

Is there a Michigan-only auto loan rate?

No - lenders price by credit profile, term, and vehicle, not by state (a few products aren't offered in every state, but pricing doesn't change at the Michigan border). The Michigan-specific money is in the tax rules and the credit union market above.

Does Michigan charge tax on a leased car buyout?

Buying out your lease is a purchase, so the 6% use tax applies to the buyout price. Factor it into the lease buyout math before deciding to keep the car.

What credit score do I need in Michigan?

The same as anywhere: roughly 660+ for mainstream bank approval, with credit unions meaningfully more flexible in the low 600s. If you're below that, see the bad-credit playbook.

Auto loan rates in Michigan.